Brown Urges Fiscal Restraint in State of the State Address

SACRAMENTO, Calif. (CN) – Two weeks after introducing his budget proposal with “fiscal caution,” California Gov. Jerry Brown on Thursday told lawmakers he remains committed to paying down debt with the state’s rising surplus and not creating new programs. Giving the annual State of the State address from the Assembly chambers, Brown reiterated his strategy of preparing for future recession, avoiding the “zigzag of spend-cut-spend budgeting” and continuing to build the state’s financial reserves. “Here at the state Capitol we often think we have more control over things than we actually do,” Brown, 77, told lawmakers. “But the truth is that global events, markets and policies set the pace and shape the world we live in.” The governor – giving the annual address 41 years after first taking office in 1975 – outlined the state’s achievements since he retook office in 2011, including implementing the Affordable Care Act and improvements in education. Brown called the enrollment of 13.5 million Californians in Medi-Cal an “historic achievement” and shifted his focus to the rising costs of California’s welfare program. He pointed to Medi-Cal costs that have spiked by $23 billion since 2011 and urged lawmakers to support his managed health care tax proposal introduced in his budget bill. The tax would allow California to comply with federal regulations and secure up to $1 billion in matching federal funds and requires significant votes from the state’s minority Republican party. “In this regard, I ask you – Republicans and Democrats alike – to seriously consider the newly revised [plan],” Brown, a Democrat, said. “This is not a tax increase, no matter what anyone tells you.” Last year Brown largely focused on climate and energy issues during his annual address to Assembly and Senate members, and Thursday he noted that 2015 was the hottest on record. He highlighted the passage of Senate Bill 350, which commits the Golden State to getting half of its electricity from renewable sources, and the Paris climate conference where California played a leading role in negotiations. Water policy issues continue to play a prominent role in Brown’s fourth and final term as most of California remains in extreme drought. As Brown continues to plan and tout his Sacramento-San Joaquin Delta tunnels project, environmentalists and farmers continue to fight the $15 billion scheme to build a pair of massive tunnels underneath the delta. Brown said water “goes to the heart of what California is” and that “pitting fish against farmer misses the point and grossly distorts reality.” The delta tunnels plan has drawn extreme opposition from environmentalists and many Northern California representative, including Assemblyman Jim Cooper, D-Elk Grove. “I remain steadfastly opposed to the Governor’s $15.5 billion plan to divert water from the Sacramento-San Joaquin Delta to Southern California,” Cooper said in a statement. “After four years of unprecedented drought, we need to take a serious look into modernizing our state’s water infrastructure, including increasing existing storage capacity and investing in new technology to help collect more water during wet years.” Brown has helped transform California’s finances from a $27 billion deficit in 2011 to a stable budget that the Legislative Analyst’s Office recently said is “better prepared for an economic downturn than it has been at any point in decades.” Since 2011, the state Legislature has enacted California’s first earned income tax credit, paid down $26 billion worth of accumulated debt and raised the state’s credit rating that was the worst in the nation. While state Republicans say they agree fundamentally with Brown’s cautious fiscal approach, some criticized him after his speech for continuing to support new taxes. Assembly Republican Leader Chad Mayes, R- Yucca Valley, said he agrees with Brown that the state’s crumbling infrastructure needs to be fixed but without increased taxes. “The governor is betting the ranch on high-speed rail and higher gas taxes – we seek comprehensive long-term solutions that rely on reform,” Mayes said. Under Brown’s budget proposal, which must be finalized by July, $2 billion of the state’s surplus will go directly to repairing state buildings and structures. On Thursday, Brown said that new fees or taxes may be necessary to fix California’s highways and bridges. “That means at some point, sooner rather than later, we have to bite the bullet and enact new fees and taxes for this purpose. Ideology and politics stand in the way, but one way or another the roads must be fixed,” Brown said.